The proposal put forth by United States President Joe Biden for the 2025 budget involves reinstating a 30% tax on the electricity consumed by cryptocurrency miners.
In the budget document titled “General Explanations of the Administration’s Fiscal Year 2025 Revenue Proposals,” the government emphasized the lack of current regulations regarding digital assets, except for broker and cash transaction reporting.
Therefore, the administration aims to introduce an excise tax—typically applied to goods like fuel—specifically targeting digital asset mining. The Treasury outlined that any entity utilizing computing resources for mining digital assets, whether through owned or leased equipment, would be subject to a 30% excise tax on the electricity costs involved in mining.
This proposal necessitates crypto mining companies to disclose details regarding the quantity and source of electricity used, including its value if purchased externally or provided by a lessor in the case of leased capacity. The tax implementation is planned in three phases, starting with 10% in the initial year, escalating to 20% in the second year, and finally reaching 30% in the third year, effective from taxable years after December 31, 2024.
Furthermore, the tax would extend to mining firms generating their own electricity and those utilizing power from off-grid sources, all of which would be taxed at a rate of 30% based on estimated electricity expenses. Pierre Rochard, vice president of research at Bitcoin mining infrastructure firm Riot Platforms, has expressed concerns that even those employing renewable energy sources like solar or wind power would be impacted.
Rochard views this move as potentially aimed at suppressing Bitcoin and promoting the launch of a central bank digital currency (CBDC).
